Landlords prefer five-year fixed rate mortgages – Landbay

Buy to let landlords are increasingly opting for the stability of five-year fixed rate mortgages, research from Landbay reveals.

The lender’s survey found that 71% of landlords plan to choose a five-year fixed rate when they next remortgage, a significant rise from 49% last year.

This preference for longer-term certainty contrasts with a decline in popularity for two-year fixes and tracker rates.

While longer-term options of seven or 10 years saw a slight uptick, it’s the five-year fixed rate that remains the clear favourite, particularly among landlords with larger portfolios.

‘The many landlords set to remortgage’

Landbay’s sales and distribution director, Rob Stanton, said: “The topic of mortgage maturity is regularly discussed in the residential market, but we mustn’t forget the many landlords set to remortgage too.

“As we have seen in previous years, our data shows that fixed-rate products continue to be the product choice for many, providing that welcome stability in a challenging market and climate.”

He adds: “It is interesting to see a decline in demand for trackers, particularly as we enter a period where we could see further movement on base rate, and in turn on mortgage rates.”

Tracker mortgages have fallen out of favour

It also appears that tracker mortgages have fallen out of favour, with just 3% of landlords planning to choose this option compared to 14% last year.

Limited companies dominate the preference for five-year fixed rates, accounting for 71% of those opting for this term.

Landlords with four to 10 properties make up the largest group seeking five-year fixes at 42%, followed closely by those with 20 or more properties at 24%.